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May 27, 2011

Property tax target set for the capital

THE Municipality of Phnom Penh aims to collect US$12 million in property
taxes in the first year, with the funds earmarked for city
improvements, Governor Kep Chuktema said.

“Our city is more
developed, but it is not enough. We need a larger budget to develop a
lot of projects in the city, to compete with other cities in Asia,” said
Kep Chuktema on Wednesday.

“If we do not try to collect more profit, we will face a large problem,” he said.

Announced
in 2009, the 0.1 percent annual tax applies to real estate with a
valuation of more than 100 million riel (US$24,510), with a few
exemptions. Properties are expected to be registered by September, with
2012 as the first full year of property tax collection, he said.

Developers said they supported collecting property taxes, but called for transparency on how the funds were collected and spent.

Khneg
Ser, assistant to the management team of the proposed $2 billion Camko
City satellite project, said it was in line with practices in most
countries.

“I think we should implement this tax, as [the funds
will] contribute to increased economic growth in Cambodia,” he said. “We
support it, and will follow as the government requires.”

He added the government should ensure that all eligible property owners and housing developers pay the applicable taxes.

However, some voiced opposition to the state-ordered property taxes, saying it would hit a property sector still in recovery.

Dangkor district land owner Cheap Sareth said he felt it was too early for the government to begin collecting property taxes.

“The government is moving too early to collect tax on property while
the country is still recovering from the global economic crisis,” he
said.